Rise of Fintech in India
Business Growth Support Advisory By - Kapil Vyas
Financial Technology or Fintech has emerged as one of the most growing sectors in India. Along with China, India ranks at the top in Fintech adoption rate. In the year 2019, the value of digital payments amounted to $65 billion which is expected to grow at a CAGR of 20% till 2023. According to the Worldline India Digital Payments Report, UPI transactions jumped over 82% by volume and 99% by value in the second quarter of F.Y. 21.
Key Categories of Fintech
- Digital Payments
Over past few years we have seen a major boom in the category of digital payments. Visiting the bank for transferring money is predicted to become obsolete and we can already see the beginning of this. With the use of smartphone one can very easily transfer money from one party to another within seconds. The country saw an emerging trend in this category during the period of demonitisation and the recent outbreak of COVID-19 has grown it multi-folds.
- Alternative Lending
Alternative Lending is a term used to describe the wide range of loans available to businessmen and consumers apart from trading bank loan. The aim of Alternative Lending Fintechs is to cover the large demand-supply gap of credit in the country. According to International Finance Corporation 40% of MSMEs have an unmet financing need of $5,200. So Fintechs using technology like Artificial Intelligence and Machine Learning would help to meet this demand-supply gap through alternative funding.
- Insurance Tech
India has witnessed a change of dynamics in Insurance Industry. Insurance Industry along with technology is in the process of disrupting the conventional insurance value chain. Insurance companies through its innovative technology has helped its customers to know about all types of insurances, pay their insurance premium, satisfy their claims, discuss with a chat bot and lot more.
- Investment Tech
People now-a-days can invest and also trade through their mobile phones instead of calling their brokers or investment advisers. One can easily know about all the types of investment opportunities available and can grab any of those just by sitting at home within just few minutes. The AI in the investment industry is growing at a fast pace and our country is already witnessing it.
If we analyse the changing trend, we could see that the future is more focused on technology driven services. This sector was one of the most slow-moving sectors in India but the rise of fintech has brought this industry to the forefront of technological changes. The use of Blockchain Technology, Internet of things, Artificial Intelligence all these are designed to serve the growth of technology. Finance Industry has been very quick and efficient in utilizing the advantages of such technologies and has been receiving the rewards as well.
“Banking has to work when and where you need it. The best advice and the best service in financial services happens in real-time and is based on customer behaviour, using principles of Big Data, mobility and gamification.” – Brett King
For any assistance or query or guidance, write us at info@sharmaandpagaria.com
Kapil Vyas
Finance Executive, Sharma & Pagaria, Chartered Accountants, Bengaluru.
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